SOURCE: Vancity Credit Union

Vancity Credit Union

April 07, 2016 08:00 ET

Report: Rising Agricultural Land Prices Threaten Regional Food Security

Prices Increase as High as $350,000 per Acre in Metro Vancouver

COAST SALISH TERRITORY/VANCOUVER, BC--(Marketwired - April 07, 2016) -  The purchase of agricultural land for estate homes and possible speculation are among the factors driving up prices of Metro Vancouver farmland and threatening the viability of local farming, says a new report from Vancity credit union.

The report, Home on the Range: Cost pressures and the price of farmland in Metro Vancouver, found the average price per acre for farms under five acres far exceeds what is financially viable for most farms. Farmland prices in Metro Vancouver range from $150,000 to $350,000 per acre for parcels less than five acres. The financial viability of many farm businesses in B.C. becomes questionable when land prices reach $80,000 per acre, according to Farm Credit Canada.

Rising residential land prices in urban centres also affect the prices of nearby parcels of agricultural land, particularly those less than 10 acres, which may be purchased as estate homes and qualify for tax advantages with minimal farming activity.

The report also found:

  • From 1990 to 2015, the value of smaller parcels has fluctuated wildly, while larger parcels have increased at a slower, steadier rate.
  • Metro Vancouver farmland runs from $110,000 to $120,000 per acre for farms around 20 acres, and from $50,000 to $80,000 per acre for parcels more than 40 acres.
  • New or established farmers who purchase land in Metro Vancouver at prevailing farm prices - and who carry a mortgage to do so - face significantly higher production costs, resulting in anywhere from 10% to 70% higher food prices (depending on crop) if they were passed on to consumers.
  • Almost one-third of the actively farmed Metro Vancouver land in the Agricultural Land Reserve (ALR) is accessed by farmers through leases from non-farmer landowners.
  • Of the total leased land in Metro Vancouver, 35% is owned by businesses, many of which are holding companies, distinguished by having terms such as holding, investment, estate, property, land or development in their name.
  • The significant non-farmer ownership of agricultural land raises concerns it is being purchased on speculation for future estate homes, development or other non-agricultural uses.

The report offers recommendations to enable the development of a robust local food system by calling for strong policy solutions to address the high price of farmland, to increase the amount of actively farmed land and to discourage the non-farm use of ALR land. 

Quotes
"If we want to have food security, we need more farmland growing produce for our families. We've partnered with the City of Surrey to help new farmers locate and farm underutilized farmland. It's a great program and we hope to see similar initiatives take hold in other communities."

William Azaroff, Vancity's vice-president of community investment

"A robust local food system requires protecting agricultural land and ensuring it's actively farmed. The high price of agricultural land is a major threat to the viability of farming in the region. Speculation and other pressures need to be addressed."

−Brent Mansfield, director, BC Food Systems Network

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About Vancity
Vancity is a values-based financial co-operative serving the needs of its more than 519,000 member-owners and their communities in the Coast Salish and Kwakwaka'wakw territories, with 59 branches in Metro Vancouver, the Fraser Valley, Victoria, Squamish and Alert Bay. As Canada's largest community credit union, Vancity uses its $19.8 billion in assets to help improve the financial well-being of its members while at the same time helping to develop healthy communities that are socially, economically and environmentally sustainable.

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